Intellectual Property, Links & Moats

Riddle me this: What do high-end furniture manufacturers and newspapers have in common? They both are terrified that the Web is ruining their businesses, so their response has been (to want) to build a big moat around their intellectual property. Yikes! are those water moccasins and alligators in those moats?

Seriously, both groups hate the Internet for what it stands for: business interruption, paradigm upheaval and an inability to figure out how to monetize the new economy -- while standing still and pouting.

Both these businesses, and you can throw in the music publishers, fashion designers, software creators and any other industry where the product (or a representation of it) can be shared digitally -- and where the distribution channel has more perceived valuable than the content itself.

Let me write that again: the distribution channel was perceived to be more valuable than the content itself. What in the world do I mean by that? Well ask Sony -- which had its tentacles into deejay playlists and decided which songs it would promote and which it would bury. Since the corporations had such a chokehold on distribution, artists and inventors were forced to virtually hand over their intellectual property – in hopes that someday their ship would come in.

If the artist’s brand begins to flourish – the power of the channel begins to diminish. The iPod democratized the music industry by allowing the brand and consumer to connect -- further weakening the channel. Despite the fact the music industry is hotter than ever -- the distributors bitch and moan -- and they should! Where else are they going to find plum jobs for merely managing reports? The benefactors now are the musicians -- and Apple!

In newspaper and magazine publishing -- the ideas now available on the Internet make the newsstand immaterial. In fashion and home furnishings the designs can be copied by knockoff artists. And both groups are up in arms and pulling up the drawbridge - and wanting to break links! But what none of these groups realize is that the brand itself is what reinforces the value of the intellectual property. Investing in the brand is what offers protections -- not moats, nor misguided suggestions by judges to disallow linking to protect thought.

There is an opportunity now for the creator to have a direct relationship with the audience. So while the channels weep and moan for being kicked off their perches, indie artists, bloggers, authors, even furniture designers are able to find ways to reap new rewards. Yes, eventually new distribution channels will evolve – although chances are the business model won’t be as ‘feudalistic’ as before; with corporations owning the intellectual property and controlling every aspect.

In the meantime, for the publishers, brand manufacturers, musicians and all other intangible creators out there -- assess what the public will value – and associate your brand with that. The money will follow.